Synthetix Bets on Multi-Collateral Perps Before Arbitrum Launch

Synthetix Bets on Multi-Collateral Perps in Arbitrum’s DeFi Ecosystem

Synthetix is positioning itself to stand out in Arbitrum’s competitive decentralized finance (DeFi) ecosystem by introducing a new feature: the ability to accept a variety of tokens as collateral. This innovation is expected to differentiate its v3 derivatives platform, according to Matt Losquadro, a core contributor at Synthetix, who shared insights with Cointelegraph.

“Arbitrum is the home of DeFi derivatives. There’s no doubt about that. There’s a large number of protocols there, and the competition is fierce,” Losquadro stated. “The big question has been, ‘Why would you use Synthetix perps in a crowded marketplace like Arbitrum?’”

He continued, “We’re going to be launching an Arbitrum-exclusive product feature, and that feature is multi-collateral. No one currently has this on Arbitrum, and it’s going to be an extremely large unlock.”

Understanding Synthetix and Its Role in DeFi

Synthetix is a DeFi protocol that specializes in providing liquidity for permissionless derivatives, such as perpetual futures and options, across various blockchain networks, including Ethereum, Optimism, and Base. The protocol made its debut on Arbitrum in July.

Perpetual futures, or “perps,” are a type of derivative that allows traders to buy or sell an asset at a future date without an expiration. Currently, GMX, a DeFi protocol on Arbitrum, leads the decentralized perps market, boasting over $430 million in total value locked (TVL), according to DefiLlama data.

Multi-Collateral Feature: A Competitive Edge

Several applications built on Synthetix are tailored for perps trading, while others focus on yield strategies like basis trades. The new multi-collateral feature, which enables users to deposit multiple types of tokens as margin collateral, is set to unlock even more possibilities.

• Margining with USD Coin (USDC)
• Margining with Ether (ETH)
• Margining with Bitcoin (BTC)

“Instead of just margining perps with USDC or any stablecoin, when you use Synthetix perps on Arbitrum, we’ll allow margining with Ether and Bitcoin as well,” Losquadro explained.

Losquadro believes this multi-collateral feature will initially serve as a key competitive strategy against incumbent Arbitrum DeFi protocols like GMX. However, he emphasized that the broader vision extends beyond just perpetual futures. “It’s really about allowing people to build on top of this system in a composable, permissionless way,” he concluded.